This week brings a huge earnings test for AAPL, AMZN, GOOG, META and MSFT. I’m going to sell Microsoft out of my 12-18 month Jubak Picks Portfolio on Monday, April 27, ahead of the earnings report. That position is up 319% since I initiated it on June 14., 2018. I am keeping Microsoft in my long-term 50 Stocks Portfolio. That position is up 40% since I initiated it on January 18, 2022.
In aggregate, the “Magnificent 7” companies have reported higher (year-over-year) earnings growth than the other 493 companies in the S&P 500 over the past several quarters. Is this trend expected to continue in the first quarter of 2026?
The answer is yes. with one huge caveat. For the first quarter of 2026, the estimated (year-over-year) earnings growth rate for the “Magnificent 7” companies is 22.8%. The blended (combining actual and estimated results) earnings growth rate for the remaining 493 companies in the S&P 500 for the first quarter is 10.1%. However… Nvidia (NVDA) is expected to be the top contributor to (year-over-year) earnings growth for the “Magnificent 7” companies (and the entire S&P 500) for first quarter of 2026. If Nvidia were excluded, the estimated earnings growth for the “Magnificent 7” companies for first quarter of 2026 would fall to 6.4% from 22.8%.
During the months of January and February, analysts reduced EPS estimates for the first quarter. The Q1 bottom-up EPS estimate (which is an aggregation of the median EPS estimates for Q1 for all the companies in the index) decreased by 1.5% (to $70.50 from $71.57) from December 31 to February 26.
This marks the first time that analysts have decreased EPS estimates in aggregate during the first two months of a quarter since the second quarter of 2025 when they cut projections by 4.0%.
A week of Big Tech earnings reports will confirm or reverse what sure looks like a sector rotation away from tech shares and into metal and mining company stocks.
Earnings growth for the Magnificent 7 stocks that have driven indexes to record highs looks like it’s now flagging even as growth in the wider market picks up.
I’d temper my exuberance a bit. Some of the big bounce today is a result of extremely negative sentiment on AI stocks in the last few weeks and some highly publicized selling by a few big name (Peter Thiel comes to mind). The big test will come in the next few days when wecsee if Nvidia’s earnings can ignite an end of the year rally across the broader market.
Nvidia (NVDA) will report earnings Wednesday November 19, for the quarter that ended on October 25. According to Zacks Investment Research, based on 13 analysts’ forecasts, the consensus EPS forecast for the quarter is $1.17. The reported EPS for the same quarter last year was $0.78. Visible Alpha reports slightly different estimates. Nvidia is expected to report adjusted earnings per share of $1.26 on revenue of $55.28 billion, each up more than 55% from the same time a year ago. Data center revenue, the chips Nvidia sells that other companies buy to train and run a variety of AI models, is expected to grow 61% and make up $49.53 billion of Nvidia’s revenue. I expect the earnings report to move the market. How could it not? It’s almost as if the financial market’s stage director had cleared the boards for Nvidia’s report.
It’s a week of earnings, earning, earnings–and a week of reports NOT dominated by either BIG BANKS or BIG TECH.
what would a week be without an inflation report. And the week will end on Friday with the Personal Consumption Expenditures index report for July. The Fed’s favored inflation gauge, the core PCE was up 2.8% year-over-year in June and 2.7% in May. Another tick higher wouldn’t be good news for investors counting on the Federal Reserve to cut interest rates at its September17 meeting. But THE event of the week will be the earnings report from Nvidia (NVDA) after the close on Wednesday, August 27. Nvidia is expected to report earnings for the fiscal Quarter ending July 2025 of $0.94 a share. The reported earnings per share for the same quarter last year was $0.65. Nvidia faces a challenge to beat lofty expectations. Wall Street analysts expect Nvidia to deliver 53% year-over-year revenue growth in the quarter and expect a 48% increase in earnings.
Today, Monday August 4, a new wave of buy on the dip lifted stocks after last week’s selling on tariff and job fears. The rebound in risk appetite drove the S&P 500 up 1.5%, its biggest rally since May. Almost every major group in the index advanced, and about 85% of stocks in the index closed higher. Tech megacaps, which bore the brunt of the selling last week, led gains on Monday. Nvidia (NVDA) and Meta Platforms (META) climbed more than 3.5%. The Russell 2000 small cap index added 2.1%. S&P 500 earnings are crushing second-quarter expectations-—with earnings growth among companies that have reported so far of 9.1%, triple the pre-earnings-season forecast and with the strongest earnings beat rate since 2021, according to Bloomberg.
In contrast to last week, the coming week is light on economic news–but heavy on earnings. The question for the week: Will what are expected to be strong earnings outweigh anxiety over the economy and tariffs? Remember that last weeks’s very solid earnings weren’t enough to pull stocks into the green in the face of negative news on jobs, inflation and tariffs.Here’s the week’s economic calendar
I expect that little by little, optimistic sentiment will continue to leak out of stock prices.
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